Item 1.01 Entry into a Material Definitive Agreement
On December 26, 2019, through our subsidiary Grand Smooth, Inc. Limited, we
entered into a Project Contract with Procare International Co., Limited
("Procare") to produce 6,500 Recirculating Aquaculture Systems ("RAS") for a RAS
fish farm development in Ru Hu, Guang Dong province. The production and
installation of the 6,500 RAS tanks is expected to begin late in the 1st quarter
of 2020 and extend over a 3-year time period. Based upon the current exchange
rates, each tank has a contract value of approximately $18,000; with the
estimated total contract value of approximately $117,000,000 over three (3)
years.
Based in Hong Kong, Procare International Co., Limited is a company in the sales
and production of audio speakers and related parts to Walmart, Radio Shack, and
Amazon, as well as other companies. After seeing our demonstration site in China
and the demand for fresh water fish, the president of Procare, Ms. Lee Chin Chu
signed a master contract with Ru Hu township to invest and build a fish farm
containing 6,500 tanks over the next 3 years.
Ru Hu is a township with a population of 52,000 and is located approximately 2
hours northwest from Hong Kong and Shenzhen. Guang Dong province is a coastal
province located in southeastern China and borders Hong Kong and Macau.
Currently, we are awaiting the initial payment before we start manufacturing. It
is currently expected the initial payment will be received in late in the 1st
quarter of 2020 and with an expected production and delivery of 1,000 to 1,500
tanks during 2020.
The Chinese and English translated versions of the Project Contract are attached
hereto as Exhibit 10.1.
Item 7.01 Regulation FD Disclosure.
Press Release
The information in this Item 7.01 of this Current Report is furnished pursuant
to Item 7.01 and shall not be deemed "filed" for any purpose, including for the
purposes of Section 18 of the Exchange Act, or otherwise subject to the
liabilities of that Section. The information in this Current Report on Form 8-K
shall not be deemed incorporated by reference into any filing under the
Securities Act or the Exchange Act regardless of any general incorporation
language in such filing.
On January 6, 2020, we issued a press release. A copy of the press release is
attached hereto as Exhibit 99.1.
Item 9.01 Exhibits
The following exhibits are filed with this report on Form 8-K.
Exhibit Number Exhibit
10.1 Procare International Co., Limited Project Contract
99.1 Press Release dated January 6, 2020
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